Question

If $396 is invested at an interest rate of 13% per year and is compounded continuously, how much will the investment be worth in 3 years?
$584.88
$583.66
$581.27
$268.11

Answer 1

A=pe^(rt)
A=396×e^(0.13×3)
A=584.88

Answer 2

Answer:  First option is correct.

Step-by-step explanation:

Since we have given that

Amount invested = $396

Interest rate = 13% per year

Time = 3 years

We will use the "Exponential growth formula" i.e.

$A=Pe^{rt}$

Here,

P denotes Principle amount

r denoted rate of growth

t  denotes number of years,

So, it becomes

$A=396e^{0.13\times 3}\\\\A=396e^{0.69}\\\\A=\ 584.88$

Hence, First option is correct.